stock

J.C. Penney downgraded after profit warning

J.C. Penney downgraded after profit warning

Both Mattel and J C Penney dragged into the red on Friday. J C Penney’s profit outlook for the third quarter did little to impress the Street. Shares hit a new low during intra-day trading and dragged several other retail stocks down too. Mattel cited the bankruptcy filing of Toys “R” Us for the decline it experienced in North American sales in its third quarter. The company has also decided to suspend its dividend.

J.C. Penney Co. Inc. JCP, -0.64% was downgraded to neutral from positive after the retailer announced a profit warning for the third quarter and full year. Its price target was lowered to $3 from $6.50. “While J.C. Penney is taking the right steps to fine-tune its footprint and merchandise mix and will continue to pay down debt with free cash flow, the sales-driving initiatives are taking longer than we expected to materialize,” wrote analysts led by Bill Dreher. Analysts say they “no longer have a constructive rating within the department store sector,” favoring Top Pick, Wal-Mart Stores Inc. WMT, -0.14% Citi also downgraded J.C. Penney, according to The Wall Street Journal. On Friday, J.C. Penney updated its guidance, saying its efforts to sell off “slow-moving” merchandise, particularly across women’s apparel, gave the company a sales books, but hurt cost of goods sold and earnings in the near-term. The announcement pulled down shares of other retailers, including Macy’s Inc. M, -2.89% and Kohl’s Corp. KSS, -0.31% J.C. Penney shares are down 1.3% in Monday premarket trading, Macy’s shares are down 2.4% and Kohl’s shares are down 0.2%. J.C. Penney shares are down more than 63% for the last year while the S&P 500 index SPX, +0.81% is up 21.4% for the period.

stock

More in stock

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem?

Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet.

Copyright © 2014 Top News Theme. Theme by MVP Themes, powered by Wordpress.